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THE SITUATION ROOM

Interview With Utah Congressman Jason Chaffetz; Russia Accuses U.S. of Spying; White House Under Fire; Russia: U.S. Diplomat a Spy; IRS Audit Released; Benghazi Talking Points Controversy Continues; FBI to Review 2006 Cruise Ship Death; Prince Harry Visits Jersey Shore

Aired May 14, 2013 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Happening now: The IRS faces a criminal probe for targeting conservative groups. The attorney general defends obtaining reporters' phone records, citing what he calls a leak that endangered American lives. And Russia accuses an American diplomat of espionage and backs up its claim with a bizarre display.

I'm Wolf Blitzer. We want to welcome the viewers in the United States and around the world. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: An IRS scandal, now a full criminal probe. We're getting new information. The attorney general, Eric Holder, he announced earlier today that a joint investigation with the FBI and the Internal Revenue Service, which admits targeting conservative groups with extra scrutiny, is now under way.

The -- CNN has also -- and CNN has just obtained the Treasury Department's inspector general's report on what the IRS did. And it isn't pretty.

Our chief congressional correspondent, Dana Bash, is working the story for us.

Dana, I know you're going through the inspector general's report. It is very, very damning.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It is. This is it, Wolf, pages and pages of damning information and analysis of what the IRS did.

The gist of it is that the inspector general says that inappropriate criteria to identify Tea Party and other groups were used, ineffective management at the IRS allowing this criteria to be in place for 18 months. And it resulted in substantial delays of applications, and allowed unnecessary requests to be issued.

And this report, if you can believe it, it just part of the IRS' troubles.

(BEGIN VIDEOTAPE)

BASH (voice-over): Never mind that the IRS targeting Tea Party groups was inappropriate. The attorney general wants to know if it was criminal.

ERIC HOLDER, U.S. ATTORNEY GENERAL: I have ordered an investigation to be begun. The FBI is coordinating with the Justice Department to see if any laws were broken in connection with those matters related to the IRS. Those were, I think as everyone can agree, if not criminal, they were certainly outrageous and unacceptable.

BASH: Criminal or not, the IRS practice of singling out Tea Party- affiliated groups appears to have gone well beyond agents in the Cincinnati, Ohio, office that handles tax-exempt applications, which the IRS first suggested.

Jordan Sekulow's law center represented 27 Tea Party groups that had trouble getting tax-exempt status from the IRS. He shared with us several lengthy questionnaires his clients got from IRS offices in California, and even Washington, D.C., which Sekulow calls excessive.

(on camera): Could it be that your clients shouldn't have tax-exempt status, that they are primarily doing political work, not social welfare?

JORDAN SEKULOW, AMERICAN CENTER FOR LAW AND JUSTICE: The IRS has not come to any of our questions that would be in the part of the normal process. These were all delays relating to the questionnaires that are at issue here.

BASH: He says delays are still happening. Just yesterday, a Tea Party client in Tennessee trying to get tax-exempt status for two-and- a-half years got this letter asking for even more information. And the questions the IRS is asking troubles lawmakers, lists of members and donors. Congressional Republicans call that unprecedented.

In this IRS questionnaire, a Tea Party group is asked to provide names of donees, recipients and grantees. That even makes mild-mannered members of Congress furious.

SEN. SUSAN COLLINS (R), MAINE: How chilling is it for an organization to get a letter from the IRS asking for its membership list? And that has nothing to do with the decision on whether or not tax-exempt status should be granted.

BASH: What does that tell you?

COLLINS: Well, it raises questions whether there's a political motivation here.

BASH: Congressional investigators have now learned the scope of this is larger than the IRS indicated last week, 471 organizations singled out for special scrutiny. Compounding the IRS' problems, lawmakers feel misled by its leadership.

SEN. ORRIN HATCH (R), UTAH: This was either one of the greatest cases of incompetence that I have ever seen, or it was the IRS willfully not telling Congress the truth.

BASH: Acting IRS Commissioner Steven Miller was informed of the targeting last year, but never told Congress.

QUESTION: Well, how about answering our questions?

BASH: On Capitol Hill today, he refused to answer reporters' questions about why.

(END VIDEOTAPE)

BASH: Now, Wolf, Miller is going to be one of the witnesses on Friday, when the House holds its hearing. And they're now going to have a lot of information to go through from this inspector general report.

One of the questions that Susan Collins raised in that piece is what everybody is asking, is whether this was politically motivated. Well, part of the answer is in this report. The inspector general says agents did not consider the public perception of using politically sensitive criteria when identifying these cases.

But then the inspector general also says, Wolf, that it could not specifically determine who had been involved in creating the criteria. But it does say it wasn't the higher-ups. It was kind of first-line officials. One other question that you asked before, which is a very important question, whether or not anybody outside of the IRS was involved in creating these criteria, was it political, did it come from the White House, especially during a campaign?

The inspector general said no. All of these officials stated that the criteria were not influenced by any individual or organization outside the IRS -- Wolf.

BLITZER: At the same time, though, Eric Holder did say he's launching his own Justice Department investigation that's separate from the inspector general did to see if there were any criminal laws that were broken potentially. And that could be significant.

BASH: Oh, absolutely, it could be significant. Now, he said very clearly that he's not sure, obviously, if any crimes were committed. But that's why they are investigating.

And that is a far different issue from whether or not anybody could potentially get a slap on the wrist or even fired. Somebody losing their job is one thing. Getting prosecuted by the federal government for breaking the law during your job is quite another. And that's something that we're obviously going to be looking for.

BLITZER: And let's hope none of these officials lies to federal authorities during questioning, because that is a crime in and of itself, as we all know from previous federal investigations. Dana, thanks very much.

Another major case exploded into headlines only 24 hours ago, when we learned that the Justice Department secretly obtained phone records from Associated Press reporters. It was part of an investigation into leaks the attorney general says put American lives at risk.

Our Pentagon correspondent, Barbara Starr, is joining us.

Barbara, you're digging into this story. What are you learning?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, the experts will tell you that the Obama administration has sought to prosecute more leaks to the news media than all other administrations combined. But the Justice Department says, in this matter with the Associated Press, it had no choice but to take a tough approach.

(BEGIN VIDEOTAPE)

STARR (voice-over): Attorney General Eric Holder says American lives were put in danger by a leak to the Associated Press. A source tells CNN's Jessica Yellin the story was about a classified CIA operation in Yemen to stop a potential attack on a U.S.-bound airliner.

ERIC HOLDER, U.S. ATTORNEY GENERAL: I have to say that this is among, if not the most serious, it is within the top two or three most serious leaks that I have ever seen.

STARR: Last May, the Associated Press, citing confidential sources, reported al Qaeda in Yemen had an advanced bomb to be carried in underwear similar to a failed Christmas 2009 attack.

The AP reported, this time, the CIA secretly moved in and seized the bomb before the alleged bomber picked a specific target or even bought an airline ticket. That report has led to a criminal investigation over who leaked the story.

The AP Monday revealed the Justice Department secretly obtained office and home telephone records for several of its employees. Holder is unapologetic.

HOLDER: It put the American people at risk. And that is not hyperbole. It put the American people at risk.

STARR: The U.S. had several secrets it wanted to keep. The bomb was designed by this man, Ibrahim Hassan al-Asiri, a master al Qaeda bombmaker already held responsible for the 2009 underwear bomb and for explosives in printer cartridges being shipped to the U.S. in 2010.

And this time, the alleged bomber was actually an agent secretly working for the Saudis. With a British passport, he could have easily entered the United States. He was able to slip away before his cover was blown, but the effort to get the bombmaker, al-Asiri, was over. And he is still at large.

Mark Zaid said, who has defended clients in federal leak probes, says the news media should be ready for more snooping by the government.

MARK ZAID, ATTORNEY: More people are relying on e-mails, and cell phones and other electronic devises that are, frankly, traceable. And it's no longer the days of Woodward and Bernstein meeting Deep Throat in a parking garage.

(END VIDEOTAPE) STARR: And I have to tell you, Wolf, we have just all received a statement tonight from the Associated Press responding to the Justice Department contention that lives were put at risk, in part.

And that AP statement says -- quote -- "We held that story until the government assured us that national security concerns had passed. Indeed, the White House was preparing to publicly announce that the bomb plot had been foiled."

So, tonight, Wolf, the AP pushing back very hard against the case that the Justice Department tried to make today -- Wolf.

BLITZER: Yes, the story clearly not going away.

Barbara, thanks very much.

We're going to stand by. We're going to get live reaction. A key congressman who had been investigating this, and a bunch of other issues, Jason Chaffetz, he is standing by live up on Capitol Hill. He's even suggesting that when it comes to Benghazi, he says there was a cover-up of the highest magnitude and perhaps, perhaps, the president could be impeached. We are going to go in-depth on that. Stand by.

Also, Russia moves to expel a U.S. diplomat it accuses of spying. But there are serious questions about some of the evidence.

And a new push to lower the legal drinking limit for drivers. How different will it be? We put it to the test.

(COMMERCIAL BREAK)

BLITZER: Following three major stories that are developing, investigations up on Capitol Hill, including the Benghazi investigation, the IRS scandal that seems to be escalating right now, and the secretly monitored phone calls. At least they were monitoring who was calling whom, not necessarily taping those conversations, Justice Department doing that to AP reporters.

Republican Congressman Jason Chaffetz of Utah is joining us right now. Among things, he's suggested that perhaps, perhaps President Obama's handling of the Benghazi terror attack could be, could be an impeachable offense.

Congressman, tell us what you mean by that.

REP. JASON CHAFFETZ (R), UTAH: Well, thanks, Wolf. Good to be with you.

Look, it's not something I'm seeking. It's not the endgame. It's not what we're playing for. I was simply asked, is that within the realm of possibilities? And I would say, yes. I'm not willing to take that off the table. But that's certainly not what we're striving for.

We want truth. We want to bring the people who perpetrated the terrorism in Benghazi to be brought to justice, and we want to have the president do what he has said he would always do, and that is be open and transparent. Thus far, the White House has not done that.

BLITZER: Here's what Jay Carney, the White House press secretary, said today in response to a question. Listen to this.

(BEGIN VIDEO CLIP)

QUESTION: Obama is being compared to President Nixon on that. How does he feel about that?

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Again, I don't have a reaction from President Obama.

I can tell you that the people who make those kinds of comparisons need to check their history, because what we have here with one issue, in Benghazi, is so clearly, as we're learning more and more, a political sideshow, a deliberate effort to politicize a tragedy.

(END VIDEO CLIP)

BLITZER: All right, that's what he's saying about you, a political sideshow, you are simply trying to score some political points.

CHAFFETZ: That's always the White House strategy, right? Just try to demoralize and take down the messenger.

We heard from three very credible witnesses, with more than 70 years of public service, saying that what happened on the ground vs. what the White House would lead us to believe were two totally different things.

The president himself has said that he wants to be open and transparent, and yet when the speaker of the House says, well, why don't you release the unclassified, unclassified documents related to Benghazi, they won't even do the most basic of things.

So, look, we have four dead Americans. I can't imagine that the White House spokesperson would ever say that about the bombings in Boston, for instance, where we had also four people killed by terrorism. Of course, we're going to look into this, Wolf. It's the necessary thing to do. And to his credit, Elijah Cummings, the ranking Democrat on the committee, said that we should have more hearings, more transparency.

So, even the Democrats who sat through the meeting are agreeing with us on this one, Wolf.

BLITZER: Thomas Pickering, the retired U.S. ambassador who led that internal State Department investigation into what happened involving Benghazi, he's written a letter today that -- we have a copy right here -- to your chairman, Darrell Issa, saying he would like to appear before an open session of your hearing. You should give him an opportunity to explain what he and Admiral Mullen did.

Are you ready to do that?

CHAFFETZ: Absolutely. I asked them personally in a letter back in February to come meet with the committee. We wanted to do it in a bipartisan way. We wanted to have some informal discussions. We wanted to be able to see the documents that they had. They refused to do it.

Now that we had credible witnesses come forward, and start to share their stories, suddenly, they want to be open and transparent. But when we tried to do it in February, they said no. We have been stymied at every single step of the way. And despite what those two gentlemen who led that committee, who led that review state to the rest of the world, they have not been open and transparent. They have refused to give us that information. Of course, we would love to hear from them, because we have some very serious questions.

BLITZER: Well, are you demanding, before there's an open session, they meet privately with you and other staff members to go through all of this? Or are you just willing to let them come and testify?

CHAFFETZ: Well, look, I will work with Chairman Issa on this. We have been asking since February for them to come meet with the committee and to share this information. I think it's fair that the United States Congress be able to review the same information and talk to the same people that they were able to look at.

And I think the American people should have at least the unclassified documents released to them. That would be fair and transparent and consistent with what the president said. But, again, my challenge with the president is, what he does and what he says are often two different things. And this is one the things.

(CROSSTALK)

BLITZER: Pickering in the letter to Chairman Issa says he would like to appear at a public hearing to discuss the work of the board.

Let's see what happens, if there are any conditions that you impose on him before that public hearing.

(CROSSTALK)

BLITZER: Let's talk a little bit about Eric Holder, the attorney general of the United States. He says that this investigation into the leak was required because it was one of the most damaging leaks in U.S. history, an AP leak that put American lives in danger. Do you agree with him?

CHAFFETZ: The scope of this is what's stunning.

The breadth of this net, the time that it went, the number of people that it covered, that's just not the American way. And to have a chilling effect, which is the word we keep hearing again and again, of the government spying on the media is just not the way we do things in this country.

Look, if you have probable cause to go after somebody, and you want to go in and look at a very narrow scope, there are sometimes justification for doing that. But as it's been laid out, as we're hearing from the IRS, and we're hearing that the -- with the attorney general and what they're doing with the media, as we're hearing with Benghazi, every time you turn around, does anybody have confidence in this government and the way the Obama administration is handling this?

I don't. And I think most people are really raising an eyebrow and saying, that's just not the way we do things, folks. Remember, we were going to be hope and change and we were going to do things differently? This is getting worse, not better.

BLITZER: On the IRS investigation, this inspector general report that just came out, among other things, they said it doesn't look like there was any outside influence on officials at the IRS to go target Tea Party organizations, other conservative political organizations.

I will read you the line. "We asked the acting commissioner, Tax Exempt and Government Entities Division, the director, E.O., and Determinations Unit personnel if the criteria that singled out conservative groups were influenced by any individual or organization outside the IRS. All of these officials stated that the criteria were not influenced by any individual or organization outside the IRS."

This apparently was done internally. Do you buy that?

CHAFFETZ: Well, it's something we're going to ask some questions about. The idea that they were targeting people based on the word selections that were out there, we had people like Senator Orrin Hatch from my same state, he had been asking a long time ago about this.

And we seem to have been misled in Congress. You go back and look at the testimony by the then acting director of the IRS and what that person was saying to Congress, did he or did he not have full knowledge of this? I think it's a question that still we need to ask and we will dive into. I know that the Oversight Committee has just announced that it is going to have a hearing next Wednesday. I'm sure the Senate is also going to be looking at that. Of course we're going to ask that question.

I hope that that's the right answer, but it's something we're obviously going to investigate.

BLITZER: But you support Eric Holder, the attorney general, when he said there will be a Justice Department investigation to determine if any criminal laws were violated?

CHAFFETZ: Oh, absolutely. Absolutely.

The people who perpetrated this, the people who are overstepping this line, they should go to jail, Wolf. There need to be consequences. What I have seen from the Obama administration is, oh, we will just blame everybody, so nobody's held accountable and there's no responsibility. And have you yet to see anybody even get fired in these type of things going back to the GSA scandal, the Fast and Furious?

You go right on down the line, we don't see people being held accountable, fired and some people need to be prosecuted and put in jail.

BLITZER: Well, four State Department officials were fired as a result of the Benghazi investigation.

(CROSSTALK)

CHAFFETZ: No, they weren't.

(CROSSTALK)

BLITZER: They were removed from their jobs.

CHAFFETZ: Wolf, let's have another discussion about this, because what happened with those four people, they led us to believe that they were fired, but they weren't fired. They're still taking in income.

(CROSSTALK)

BLITZER: They're not working at the State Department.

CHAFFETZ: I challenge you on that.

BLITZER: All right.

CHAFFETZ: Let's have another discussion about that.

BLITZER: Let's check it out, because he specifically said those four individuals who had direct responsibility for the lax security at that consulate in Benghazi, they were removed from their jobs, they were punished, they were penalized. But we will check. We will check into it and get the specific information.

CHAFFETZ: I don't think so. That would be great.

BLITZER: All right, Congressman, as usual, thanks very much for coming in.

CHAFFETZ: Thank you.

BLITZER: A new spy scandal broke today. The Russians say they caught a CIA agent in Moscow. How badly could this damage the Obama administration's relationship with Moscow?

(COMMERCIAL BREAK)

BLITZER: Happening now: an American diplomat in Moscow accused of spying, but the Russia evidence against him seems pretty strange. A new report on the IRS and its targeting of conservative groups. Plus, why the FBI is taking another look at the death of a honeymooner on a cruise ship.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Cold War echoes in Moscow, where intelligence officials accuse an American diplomat trying to recruit a Russian agent to spy for the United States. But experts say they see some signs of a setup. CNN's Brian Todd is working the story for us.

Brian, what are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the Russians put this alleged spy on display, saying he tried to recruit a Russian double agent.

Between those theatrics and the display of what the Russians said what were his spy gadgets, intelligence experts are a little skeptical.

(BEGIN VIDEOTAPE)

TODD (voice-over): Picked up on the streets of Moscow, videotaped wearing an almost comical looking wig, a man Russia's counterintelligence agency says is CIA spy Ryan Fogle.

The Russians say he was trying to recruit a double agent from one of Russia's special services. The FSB says it detained Fogle briefly, then handed him over to the U.S. Embassy in Moscow, where it says he held the position of third secretary, that embassy, its ambassador, not commenting. The CIA's not commenting. The State Department confirms someone at its embassy was briefly held, but otherwise:

PATRICK VENTRELL, STATE DEPARTMENT DEPUTY SPOKESMAN: We have no further comment at this time.

TODD: Russia's Foreign Ministry said -- quote -- "Such provocative action in the spirit of the Cold War does not contribute to building mutual trust."

The Russians also displayed some items they say Fogle was carrying, wigs, a knife, dark glasses, envelopes full of cash, what appears to be a Moscow map book.

When we showed counterintelligence expert Eric O'Neill those pictures in the video, he said the man I.D.ed as Fogle could be a CIA officer, but he said this is not spycraft. It is stagecraft.

ERIC O'NEILL, FORMER FBI COUNTERINTELLIGENCE OFFICER: I very much doubt that a highly trained CIA operative is going to be walking the streets of Moscow wearing a really bad blond wig. It's poor tradecraft and it looks like a setup to me.

TODD: O'Neill believes the Russians likely planted that material on Fogle for dramatic effect, maybe to stir up anti-American sentiment, achieve a political objective, or distract attention from some other matter.

O'Neill is a former FBI counterintelligence officer who took down FBI agent Robert Hanssen, who was spying for the Russians. O'Neill says the tactic of planting material on a spy is a trademark of Russian President Vladimir Putin, himself a former KGB officer.

(on camera): O'Neill says the U.S. intelligence agencies have much better disguise training than what was displayed in Moscow. He says they teach you depart only slightly from your normal look. Wear sunglasses, maybe a ball cap on backwards.

And when I told an official here at the Russian Embassy in Washington of O'Neill's belief that the Moscow pickup was a setup, I got a stiff no comment.

O'Neill says, if the Russians really believed Fogle was recruiting a Russian double agent, then rounding up Fogle was a mistake.

O'NEILL: They want to pick up the person he's recruiting. He's irrelevant. Actually, it's better for them to keep him in place because they know that he is potentially a spy and they can watch him in order to catch the Russians.

(END VIDEOTAPE)

TODD: O'Neill says all the Russians have done by detaining this man who they call Fogle is ruin his career.

The Russians have deemed him persona non grata, meaning he will have to return to the U.S. And if he does work for the CIA, O'Neill says it's unlikely he will ever be able to work undercover again, even in another country. O'Neill says the different security agencies are all going to now know what his face looks like. Wolf, can't go undercover anymore.

BLITZER: And there supposedly was also a very strange letter that the Russians released that Fogel (ph) apparently have.

TODD: Yes. Just another part of the Russians' display there in Moscow. Written in Russian, translated, it starts with this phrase, "Dear friend, this is a down payment from someone who is very impressed with your professionalism and who would greatly appreciate your cooperation in the future." The letter offers about $100,000 up front, $1 million a year for what it calls long-term cooperation.

O'Neill kind of spotted this type of language in the letter and he said, that's the kind of language, that "dear friend" designation and the way it's written, that's the way Robert Hansen and the Russians used to write to each other, he said. And he was looking at those letters for a long time, Hansen's letters. He says the Russians wrote letters that way. So they could have written that.

BLITZER: Very strange, the whole story. I know there's a lot more presumably that's going to be coming out. And you'll stay on top of it for us.

TODD: Yes.

BLITZER: Brian, thanks very much.

Let's get some more now on our top story, the breaking news we've been following. The inspector general's report on the IRS targeting of conservative groups seeking tax-exempt status. Our chief White House correspondent, Jessica Yellin, is joining us. She has got more.

Jessica, Jay Carney, the White House press secretary, he was grilled on this scandal at the press briefing over there earlier in the day. I know you were sitting in the front row. So what is the White House's next move?

JESSICA YELLIN, CNN CORRESPONDENT: Hi, Wolf.

Well, right at this hour, the White House is reviewing that IG report. And the White House so far isn't saying exactly what the president will do. But we got a few clues, in part earlier today at Jay Carney's briefing. As you know, he made clear that the president remains outraged by these actions. And here's a little bit of my exchange with Jay. We'll talk about it on the back side.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We have seen the reports, as the president said. And if the reports are true, he would consider them outrageous.

YELLIN: The IRS has acknowledged that some of the wrongdoing happened. So the president and this administration could agree?

CARNEY: I think you heard the president say yesterday that, if it turns out to be the case. And again, there's a lot of reporting, not all of it complementary.

YELLIN: He said there was IRS personnel, which sounded like it was isolated. We've now learned that it was...

CARNEY: How could IRS personnel be isolated? That could be the entire agency. I mean, it's -- he's basing it...

YELLIN: But it touched the Washington, D.C., office.

CARNEY: Jessica...

YELLIN: He said that this is a broader problem.

CARNEY: He's concerned by -- he's concerned about every report he sees on this. You can believe that he is concerned by that. And that is why he looks forward to finding out what the IG report says. But we cannot, and we should not pre-judge...

YELLIN: And what's the consequences? What are the consequences of his outrage?

CARNEY: We'll see.

(END VIDEO CLIP)

YELLIN: So, Wolf, the question now is, precisely who will take a fall for this? You would expect someone would. There are just two people at the IRS who are political appointees, but that IRS report seems to finger other people inside management at a lower level.

Now, one thing we do know is that when there was another scandal inside a government agency earlier in the administration, at the GSA, people did lose their jobs. So we expect, and the indications have been there will be swift and serious action. We'll look for it, maybe as soon as overnight, Wolf.

BLITZER: Really? That quickly, you think?

YELLIN: I don't know. We're just looking to see. We'll stay on standby.

BLITZER: All right. We'll stay on standby, as we always do. Thanks very much, Jessica.

The other major story, dogging the White House right now, the controversy over those talking points about the Benghazi terror attack last September 11. Our chief national correspondent, John King, has been looking into all of this for us. So what's the danger here, if there is one, for the Obama White House?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, we covered the White House together for a long time. We're in a second term. Yes, it's only May 2013, but 2014, that six-year presidential itch election, they call it. The six-year itch election is past (UNINTELLIGIBLE), a risk to the president.

You have Benghazi. You have now this blossoming IRS scandal which has legs that could last for months. You have the questions about the Department of Justice.

So you know now you have an emboldened Republican party. You just heard Congressman Chaffetz tell you he's not even ruling out impeachment as a possibility. That seems like hyperbole, but it tells you, you have a Republican Party ready to keep going on Benghazi and keep asking questions, keep demanding witnesses.

Now there's a new criminal investigation. The Justice Department's launching one. But the Hill wants more answers on that. So you have an emboldened Republican Party.

And the flip side and the other risk is, now you're starting to see Democrats say, "We want answers from the IRS. We're not certain what's going on in this administration. We think the president should be tougher and act faster."

If you get those two combinations: the emboldened Republican Party and what I'll call Democratic drift, if they start drifting from the president -- remember, the last two years with the George W. Bush administration, rising opposition to the Iraq War. Then Katrina came along. The president not only had a problem with Democrats -- he was a Republican, George W. Bush -- Republicans wouldn't support him on Social Security. Backed away from immigration. If that happens to this president, bad news.

BLITZER: Is it too early to start thinking of the political ramifications down the road, mid-term elections next year?

KING: Yes and no. It's never too early. This is Washington, after all. Look, this is a day, the president, a lot of his top officials met with law-enforcement officials to talk about immigration reform. That's what they would like to be talking about, their agenda.

There was actually good news on the deficit today. The deficit down a little bit. It lengthens the period of time where they have to worry about the debt ceiling again.

So the good news is getting overwhelmed. The positive news, or the stuff the administration likes talking about is getting overwhelmed.

You talked about that midterm election. What are those about? Base, right? Base politics. Again, Republican base is energized over Benghazi already. Now they see a government, an administration -- yes, the White House will say it was the IRS, an independent agency -- but the federal government targeting the Tea Party. Who's that going to mobilize? The conservative base. We will have more fights over the Tea Party.

And you have the Justice Department and the attorney general who the Republicans have long been at war now in hot water. So a lot of things -- it is -- it's early. This could all change by the time we get around to next year. But if you take an early look, you have an engaged Republican base, increasing intensity there, and the beginning evidence of some Democrat drift now. The question is, does it become demoralized? If the -- if you get that combination, that's what we had in 2006. When Democrats had a very good year, it set them up for 2008.

BLITZER: The investigation starts. You don't know where it's going to wind up. John, thanks very much.

Other news we're following, including the FBI. Why is the FBI taking a second look right now at the mysterious death on a honeymoon cruise?

(COMMERCIAL BREAK)

BLITZER: New Orleans police now say they have a suspect in the mass shooting that injured 19 people over the weekend. Lisa Sylvester is here. She's got that and more of the other day's top stories -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, they're looking for a teenager named Akein Scott. Authorities are thanking people for called-in tips after they released these pictures showing someone who seems to be firing a handgun into a crowd during Sunday's Mother's Day parade.

Scott is only 19, but he has been arrested in the past on firearms and drug charges.

And whatever you consider one too many at happy hour, well, prepare to subtract a few. The federal government wants to change the legal limit that can get you busted for drunk driving. Right now, it's a blood alcohol level of .08 percent. The National Transportation Safety Board wants all 50 states to lower it to .05. They say it will prevent 500 to 800 deaths a year.

And whether you chalk this up to greed or ignorance, or quite frankly, just plain stupidity, it is an incredible loss to history and culture. Authorities say a 2,300-year-old Mayan pyramid in the Central American nation of Belize was bulldozed last week, so that its limestone blocks could be turned into fill for roads. It's illegal, and the contractor and landowner may face charges. But the pyramid and its contents are just gone. Gone forever.

It's so heartbreaking that that happened. But it did. And it's gone forever. Nothing they can do about it at this point.

BLITZER: No. Heartbreaking indeed. All right, Lisa, thank you.

The New Jersey governor, Chris Christie, welcomed a new VIP to his state. We're talking about Prince Harry. He came to visit.

(COMMERCIAL BREAK)

BLITZER: There's new hope for solving the mystery of a honeymoon that turned to heartbreak. CNN's Mary snow is joining us now with details. What have we learned, Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, this was a case that gained widespread attention when it happened. You may remember the story of George Smith, a 26-year-old newlywed who disappeared during a cruise in the Mediterranean. Early on, his family was convinced he was murdered. Now they are hopeful arrests will be made because a new set of eyes will be reviewing the case.

(BEGIN VIDEOTAPE)

SNOW (voice-over): It's been nearly eight years since George Smith disappeared. He and his new bride were on their honeymoon on a Royal Caribbean cruise ship in July of 2005 when he vanished. The case had been handled by the FBI in Connecticut, where Smith's family lives. But now, his parents and sister believe they're closer than ever to seeing justice served, because the FBI in New York has agreed to review the case.

GEORGE SMITH, VICTIM'S FATHER: Yesterday we put a circle on the calendar, because we felt that that was the day that we had gone from a minus to a plus. And that we felt finally that we were going to get answers.

BREE SMITH, VICTIM'S SISTER: A lot of evidence has been accumulated now. And I think that, with a fresh set of eyes looking at that evidence, that arrests are inevitable.

SNOW: Attorney Mike Jones is the man who pushed for the FBI in New York to review the evidence.

MIKE JONES, ATTORNEY FOR SMITH FAMILY: I've always believed that George was murdered. I thought there were too many facts that pointed to foul play, as opposed to just an accident. SNOW: There was a photo showing blood outside Smith's cabin, and then Jones says, Royal Caribbean turned over information, including thousands of documents, as part of a settlement in the case.

And a potential key piece of evidence, he says, which hasn't been made public, is a video, showing four men on the cruise at the time, three of whom are Russian-Americans who had befriended Smith. Jones says the video shows the men the day after Smith disappeared, joking about Smith, after being questioned by officials.

JONES: At the end of the video, one of the Russian men stands up and says something to the effect, "Told you I was gangsta." And that was in the context of George's death. And that's a very -- that's a very incriminating statement.

SNOW: Asked about the review by the FBI in New York, Royal Caribbean said in a statement, "The company has worked closely with all law- enforcement agencies, including the FBI, and remains readily available to them if there is any further inquiry into the matter."

Smith's family is determined to get answers.

MAUREEN SMITH, VICTIM'S MOTHER: We couldn't stop. We just couldn't stop. We have to see this through to the end. Nobody can do that to a human being. You wouldn't do that to a dog, what they did to him.

(END VIDEOTAPE)

SNOW: And the FBI in New York wouldn't say more beyond the fact that it's reviewing the case. Attorney Mike Jones says one of the reasons he pushed for the transfer to New York is because two of the targets in the investigation live in New York -- Wolf.

BLITZER: Mary Snow with that report. Thanks very, very much.

Prince Harry's U.S. tour, a far cry from a little bit of scandal that he had when he visited Las Vegas. We're going to catch up with the third in line to the throne. That's coming up next.

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BLITZER: The Jersey shore among the latest stops for Britain's Prince Harry on his U.S. tour. He saw some of the $37 billion in damage that Hurricane Sandy did. His guide for the trip: the governor, Chris Christie. Our royal correspondent Max Foster went along, as well. He's joining us with more.

Max, how did it go?

MAX FOSTER, CNN CORRESPONDENT: Yes, Wolf. It was interesting seeing him there in New Jersey with the governor. The governor very keen to be seen with him, it seemed.

And he talked about how this is great to be back on the news agenda, because he said that there was so much coverage of Sandy at the time but not a lot of coverage about the rebuilding effort, and there's a great opportunity, he said, to show Prince Harry and the media around what's been done there.

And it's interesting now. As soon as Prince Harry left, they started dismantling that roller coaster, which has always become an iconic image there.

But Prince Harry, as well, praising what he saw as the American spirit on full display there.

(BEGIN VIDEO CLIP)

FOSTER: What are your thoughts on seeing the community here today?

PRINCE HARRY, UNITED KINGDOM: Well, it's fantastic American spirit. Everyone getting together and making things right. It's fantastic. Really good.

(END VIDEO CLIP)

FOSTER: OK. We're having a problem with the sound bite there, but he basically talked, Wolf, about the American spirit really being alive in this community, which is devastated by Sandy. And there were big crowds there. So certainly they liked the attention he was giving them, as well.

BLITZER: That sound bite, I apologize to our viewers. We didn't hear exactly what they said, but the bottom line in all of this, it was pretty impressive, a good day for the governor and the prince.

FOSTER: Yes, it was. And also, you saw the prince later on going to a trade event in New York, which was being hosted by the prime minister. So again, an opportunity for the politicians to really bask in this attention that Prince Harry's getting on this tour.

And Prince Harry certainly thinks it's going well. We had an opportunity here to see him playing baseball. We didn't know whether he'd be good or not, but he threw himself in and actually got a home run.

So really wowed the kids in this sort of underprivileged area where he's encouraging sport. They thought he was a great guy, really down to earth. And they also talked about how he's going to be this fantastic uncle, which was taking it on to the next level of this royal story, Wolf, which is of course, the royal baby coming in the summer.

BLITZER: He seems like a great guy, indeed. All right. Thanks very much. Max Foster with a good assignment for him.

Coming up, some unexpected fallout to a foolish prank.

(COMMERCIAL BREAK)

BLITZER: CNN's Jeanne Moos has the story of a tour guide who took the "getting close to nature" thing way too far. (BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Africa. A continent where a cheetah can jump up and join you.

UNIDENTIFIED MALE: Oh, my God.

MOOS: On safari, a place where a bike racer can get run over by an antelope.

UNIDENTIFIED MALE: Whoa! Holy cow!

MOOS: And despite a concussion, live to laugh about becoming human road kill. But South Africa's Kruger National Park is not a place where you expect to see a man charge an elephant and not just any man. An off-duty field guide egged on by his mates.

UNIDENTIFIED MALE: Run at him! Run at him! Run! Run at him!

MOOS: In this "man bites dog" story, the man seemed to have won, until the video was posted and a backlash from elephant lovers began.

(on camera): Most commenters seemed to side with the elephant, and I mean really side with it.

(voice-over): "What a pity the elephant didn't flatten him and his stupid whooping friends" was fairly typical. Though some didn't see the harm: "What's the big deal? It's not like the elephant's going to go home and cry."

(on camera): The guide may have survived the elephant encounter, but his job didn't.

(voice-over): His employers, Singita, a well-known group of luxury hotels and camps, focusing on wildlife conservation, fired him.

And then, Brian Masters manned up and accepted responsibility on the Facebook page: "I am so sorry this happened, and I wish I could undo the stupidity of the act, but I can't." He wrote of "years spent as a guide getting people passionate about conserving these wild areas undone in 45 seconds of folly."

By coming forward with his public, seemingly heartfelt apology, a former guide addressed the elephant in the room. In this case, the elephant in the bush.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: I just want to clarify. Earlier in the program when I interviewed Congressman Jason Chaffetz, he said that four State Department employees who were punished in connection with the Benghazi situation, he said they were not actually fired. He said they still receive a paycheck from the government. We did some checking, and here's what we found out. As far as the paycheck is concerned, for three of them, apparently they're still getting a government paycheck. But they are on administrative leave. Three of them, they were relieved of their duty. They still collect their government paychecks, but three of them, a fourth official who was punished resigned. Just want to clarify what happened to those four officials. We'll continue this conversation with Congressman Chaffetz in the days to come.

Remember, you can always follow when's going on here in THE SITUATION ROOM on Twitter. You can follow me, @WolfBlitzer.

"ERIN BURNETT OUTFRONT" starts right now.